Doing Business in the Philippines as a Franchise

Why Franchise?

Franchising allows an entrepreneur to practice and use an existing perfected business concept. For an entrepreneur who is new in the Filipino market and aims to start a risk-free venture, franchise is the best business vehicle to opt for.

There are two kinds of franchising options existing in the Philippines:

Product Franchising: In this form of franchising, the manufacturer gives the right to sell its products to the franchisee, however, the manufacturer does not provide with any methods for conducting the business. Examples: Car dealerships, service stations.

Business Format Franchising: In this form of franchising, the franchisor grants the franchisee with the right to use the name, market the products and services of the franchisor as well as with the managerial and operational know-how of the business. Examples: Subway, Pizza hut.

When an entrepreneur buys a franchise, he/she mainly benefits from the years of experience and the necessary know-hows of the franchise system. It has the main advantages of i) having a ready-made operating system, brand and support and ii) having a low-cost and hassle-free initial setup.

Industries where franchising is common

The Philippine Franchise Association (PFA) has members ranging from micro to large, involved in food, retail, services and other types of businesses. Some of the noteworthy arenas to conduct business in Philippines as a franchise are i) food kiosks, ii) water refilling stations, iii) spa and salons, iv) vending & service machines, v) shoe repair, laundromat, payment centers & other personal services and vi) education.

Requirements

Financial

The Franchise fee is generally determined by the profitability of the business. The fee ranges from US$2,000 to US$100,000 and over, depending on the size of the franchise system;

Additionally, our Client must pay a one-time front-end franchise fee to the franchisor to secure the privileges of using the business concept, attending their training program, and learning the entire business;

Further, there would also be a royalty fee payable by our Client every month. The fee would be roughly around 2 to 10 percent of the profitability of the business or an agreed upon monthly figure.

Legal

In the Philippines, prior to operating a business as a franchise, our Clients must comply by the directives issued by the Department of Trade and Industry (DTI);

The chosen franchisor must be a legal member of any or all accredited franchise associations in the Philippines;

Majority of the legal franchisors in the Philippines are registered with the Filipino International Franchise Association (FIFA) which further allows them to enjoy several benefits such as i) using FIFA logo for business resolutions, ii) franchise auditing of existing franchise programs and iii) franchise settlements, among many other benefits;

Every franchise must sign a Franchise Agreement between two or more parties through which the Franchisor grants the Franchisee the right to conduct the business under a proposed marketing plan;

The franchisor must also have a physical office where-in its franchisees and clients can visit and where the franchisor can assist his employees with their concerns;

Steps towards establishing a franchise

Since over a decade, Healy Consultants Group PLC have been assisting its Clients to choose the appropriate franchisor by i) conducting a thorough background check of the franchisor, ii) checking the level of demand for the franchisor’s products and services, iii) checking the level of support that our Client will likely receive from the franchiser and iv) ensuring that the franchiser’s business model matches with the business goals of our Client;

Our Legal and Compliance Department thereafter carries out the due diligence of the prospective franchiser that includes i) securing the business address, e-mail address, website, fax number and any other contact information of the franchiser, ii) a copy of DTI or SEC registration, iii) details of the Board of Directors and Officers and iv) details of the training and the trainees for the franchise;

Further, the Healy Consultants Group PLC would proceed to schedule a face-to-face interview between our Client and the franchiser;

Thereafter, our Firm would draft a franchise business agreement for our Client and the franchisor to agree upon and sign up. Following this our Client would become the beneficiary owner and operator of the Franchise;

Healy Consultants Group PLC highly recommends our Client’s franchise to become an official member of the FIFA. We would assist our Client in securing the PFA membership by:

completing and submitting the following documents on behalf of our Client:

Contact us

Testimonial

“Pirster Pte is happy with the work that Healy Consultants undertook for the company. International incorporation can be fraught with opacity, anxiety and vulnerability - especially if it is being done remotely as we did. Healy Consultants worked really hard to make it transparent, straight forward and confidence-inspiring. I look forward to working with Healey Consultants again on future work and happily recommend them to others.”

Fiona Thompson, Managing Director Pirster Pte.

“We had taken Healy Consultants assistance in incorporating our entities in some of the complicated jurisdictions. Their approach right from the beginning has been very systematic, clear and efficient. It has been a pleasure to work with all of them.”

“Thank you Healy Consultants for swiftly project managing my engagement. From the moment I met you in Singapore Healy Consultants attended to my requirements and specific needs. I am more than satisfied with your service. Moreover, your weekly updates allowed me to continue to focus my attention on my global business while trusting you to deliver as promised.”

“Thank you Healy Consultants, you were instrumental in setting up of my Hong Kong based company, the whole process was completed in a professional and timely manner.”

Terry Skews, CEO Brittany Offshore Limited

“Healy Consultants, a professionally managed firm with clear understanding and knowledge about what client expects from them and delivers the same in a professional and timely manner. Kudos to their team.”

“Incorporating any company is comparable to setting the foundation blocks of your new company building, which you aim to build in the best location available. By choosing Healy Consultants you are laying the perfect foundations.”

“The one word that defines Healy Consultants is perfect professionalism. If you have Healy to set up your business abroad, you could focus on the operational overhead and let Healy take care of the rest. From Incorporation to Taxation, it’s a one stop solution. Rest assured, you will have the best people in the Industry working for you and providing you with the best possible information and suggestions.”

Raja Chakraborty, Director Streamlyn Pte. Ltd.

“Thank you Healy Consultants for successfully project managing our business set up in Kuwait, Lebanon, Qatar and Bahrain.”

“When it was time to establish a Space Academy in Singapore, TriVector needed a knowledgeable firm that could not only help us establish our infrastructure, but could also advise on the local and regional business climate. Healy was that firm, which is why we've been satisfied Healy Consultants for almost five years now.”

Timothy F Kauffman, CEO Trivector Services

“Finding the right partner was critical for VESL’s expansion in Asia and working with Healy Consultants has made this possible.”

“Healy Consultants were instrumental in the set up of our company. They have continued to provide exceptional support and advice over the years.”

Susan Gunnery, Managing Director Qudoss Group

“Healy Consultants is the best firm that we have ever worked with. Through our entire business relationship we were satisfied with provided level of quality and services. Healy Consultants have been responsive and detail oriented which has allowed us to stay focused on our business and not getting distracted with small details.”